Correlation Between Heungkuk Metaltech and DB Financial
Can any of the company-specific risk be diversified away by investing in both Heungkuk Metaltech and DB Financial at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Heungkuk Metaltech and DB Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heungkuk Metaltech CoLtd and DB Financial Investment, you can compare the effects of market volatilities on Heungkuk Metaltech and DB Financial and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Heungkuk Metaltech with a short position of DB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heungkuk Metaltech and DB Financial.
Diversification Opportunities for Heungkuk Metaltech and DB Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Heungkuk and 016610 is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Heungkuk Metaltech CoLtd and DB Financial Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Financial Investment and Heungkuk Metaltech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Heungkuk Metaltech CoLtd are associated (or correlated) with DB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Financial Investment has no effect on the direction of Heungkuk Metaltech i.e., Heungkuk Metaltech and DB Financial go up and down completely randomly.
Pair Corralation between Heungkuk Metaltech and DB Financial
Assuming the 90 days trading horizon Heungkuk Metaltech CoLtd is expected to generate 1.45 times more return on investment than DB Financial. However, Heungkuk Metaltech is 1.45 times more volatile than DB Financial Investment. It trades about 0.26 of its potential returns per unit of risk. DB Financial Investment is currently generating about 0.24 per unit of risk. If you would invest 460,000 in Heungkuk Metaltech CoLtd on September 14, 2024 and sell it today you would earn a total of 80,000 from holding Heungkuk Metaltech CoLtd or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heungkuk Metaltech CoLtd vs. DB Financial Investment
Performance |
| Timeline |
| Heungkuk Metaltech CoLtd |
| DB Financial Investment |
Heungkuk Metaltech and DB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heungkuk Metaltech and DB Financial
The main advantage of trading using opposite Heungkuk Metaltech and DB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heungkuk Metaltech position performs unexpectedly, DB Financial can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DB Financial will offset losses from the drop in DB Financial's long position.| Heungkuk Metaltech vs. Korea New Network | Heungkuk Metaltech vs. Solution Advanced Technology | Heungkuk Metaltech vs. Busan Industrial Co | Heungkuk Metaltech vs. Busan Ind |
| DB Financial vs. KB Financial Group | DB Financial vs. Shinhan Financial Group | DB Financial vs. Hana Financial | DB Financial vs. Woori Financial Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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